Member Info for getafgrip

FD - Yes, puzzling, perplexing, frustrating - I completely agree. Hopefully agreed financing will be the catalyst that drives the share price up.

Sounds like it has a full cargo of phosphoric acid rather than oil though!

Tanker-napping:

https://www.bloomberg.com/news/articles/2023-11-26/israeli-linked-oil-tanker-boarded-off-coast-of-yemen-afp-says

I agree that it is a long wait, but there are timebound parameters coming in to view on the horizon. Deltic Energy's year-end is the 31st December 2023.

Last year its unaudited results for 2022 were announced on the 20th April 2023. This is a bit tardy, but in no way unusual for a relatively small company. It seems likely, but by no means certain that any announcement on funding will be released well before April so that Deltic maximise the publicity opportunity of both events.

https://www.energy-pedia.com/news/united-kingdom/deltic-energy-announces-final-results-y-e-31-december-2022-191247

Personally, my target date for holding Deltic shares was the announcement of final results for 2023, whatever happens in the meantime. It may be a rocky ride until Pensacola oil likely floods onto the bottom line, but I still cannot see a circumstance where this will not happen. The reality is that finances will never look 100% secure for a company like Deltic until the oil actually flows or prospects go through the roof.

In the meantime there are also too many variables to value Deltic accurately. Once the facts & figures, forecasts, financing, & prospects are released everything will change dramatically. There is a financing "gap" at the moment, but it may be that an approach has been made to Deltic by a prospective suitor.

Lending - great to hear from you. I thought you had given up the ghost on this one! Also an excellent post with your usual measured business analysis. At the risk of this becoming a mini mutual appreciation society I cannot disagree with a single word of what you have said.

When you wade through the irrational exuberance & groundless optimism of many investors on this thread, you are left with statements from the company which are often bordering on being misleading and ambiguous, in tandem with obviously slowing growth & dismal competitive performance.

Like you I saw Darktrace as being a fast growth company in exactly the right place at the right time, but my enthusiasm has been waning rapidly, even from the low point I had reached some time ago. Originally, like many others i was a long way up in only a few weeks, then sold out from my ISA, share accounts etc at £6.475 on the way down from its initial high & had no intention of buying back in. Then I bought back in - hindsight is a wonderful thing!

More recently I have been thinking along the lines of what is each Darktrace customer worth, principally to another company!

Investors should not dismiss what others are saying simply because it is not necessarily what they want to hear!

The following is a list of the 10 largest publicly traded cyber security companies. It is worth looking at the market capitalisation compared to Darktrace & also when the companies started i.e. how long they have been in the market.

https://investingnews.com/daily/tech-investing/cybersecurity-investing/top-cybersecurity-companies/

Estimates vary but there are around 3500 companies competing in the cyber security space. Is it a difficult fragmented market, ripe for consolidation? Yes!

It is a fact recently reported by Darktrace that they increased their customer base by 126 over the previous quarter. People need to consider this in terms of market penetration, cost of customer acquisition, success rate of 1200 + marketing and sales staff over a 3-month period.

Is growth currently stagnating? The answer for now is yes! The current rate of growth is declining not increasing, but say there is no blip upwards a 126 increase in customer numbers in a quarter, on a simple rather than compound basis, equates to an increase of 504 customers in a year.

With a customer base of 8000 this means that it will take Darktrace another 16-years to double its customer base, which is already way behind many of its competitors!

Boyo - no real surprise that the US is maximising oil output, but hitting a record output in October is quite staggering.

Biden has certainly pushed & probably incentivised shale producers to work flat out to help reduce the OP. The Great Satan even did a tour of "friends" in the middle east to plea for increased output quite recently. He hammered down on the refinery margins that were seen as excessive & leading to excessive profits. Jim Ratcliffe at Ineos is threatening closure of Grangemouth by 2025, citing the worldwide issues with refinery margins. Don't play poker with him when you see what the Scottish Government will pay in subsidies to keep it open!

Biden has been playing around with when the US releases or tops up the SPR in an attempt to influence oil prices. No doubt behind the scenes Hedge Funds & Investment Banks etc have been briefed on what is expected of them. He has even explored opening up trade with old protagonists including Venezuela and Iran.

Whilst Biden might not succeed completely in putting together a "counter-cartel" type agreement between OPEC customers he seems to be putting together some resistance to the oligopolistic dictates of OPEC+. He is hitting them hard when they have off the map infrastructure projects to pay for. Probably a sizable war, or world event, or bitterly cold winter on the East coast of the States, will expose the fragility of what Biden is attempting, but the Israel Hamas conflict & a bit of Iranian ship-napping has not pushed the oil price in the direction shareholders would like.

I think we all agree any financial uncertainty is going to be unsettling & depress the share price relatively. The longer this funding gap remains, the more pressing the perceived need to resolve the situation, the harder Deltic will be negotiating an acceptable commercial deal. The reality is probably Deltic have narrowed it down to 2-3 preferred lenders and they are at the stage of playing them off against each other, seeing who blinks first to get the best deal!

It is impossible not to see the prospective pot of gold in terms of proven reserves at Pensacola alone, and the 30% stake held by a company only valued at around £20 million. If memory serves me right, Shell will also bear the first 75% of drilling costs up to a maximum of £25 million expended. "Transformational" for Deltic - it certainly looks like it.

Apologies for the repetition Larry - I should pay more attention!

Oilprice.com are looking at the possibility of supply cuts coming out of the OPEC meeting:

https://oilprice.com/Latest-Energy-News/World-News/OPEC-Said-To-Consider-Additional-1-Million-Bpd-Output-Cut.html

Also it looks like icy weather forecasts for the East Coast of the US. This is always a big factor for me, that can harden oil prices if it is prolonged.

Looks well reasoned:

https://oilprice.com/Energy/Heating-Oil/Unwarranted-Demand-Pessimism-Could-Lead-To-Big-Oil-Price-Rally.html

There is a lot of analysis out there, essentially repeating the statements that were made by Wael Sawan when presenting the 3rd Quarter results. However conversely, if he was open to considering acquisitions, it seems highly unlikely that he would say "yes, as it happens we are looking at making a big acquisition right now, with the intention of doubling our size say!" Strategy can be hugely complex, but I would not expect him to reveal his hand, whatever his intentions.

Just to add to the "spoofing the markets" theme. It is an odd concept, particularly when you only pick up on part of it. For instance you look for a rational reason why anyone would buy a single share or £1 worth shares. It seems odd because we all know a £1 purchase .will surely not drive a market in any way.

The reality is that many of the trades across the markets are driven by algorithms these days. These could be literally based on anything the author has coded into the system. So, say on a particular trading day there are 10 trades. Eight of them are £1 purchases, started at the opening bell and then made at hourly intervals through the day. The other two trades are sales each of 1 x million £'s worth of shares.

So that a particular algorithm might inform its user that 80% of purchase trades that day were buys, purchases took place every hour of the day, 80% of all trades that day were buys, only 20% of trades were sales etc. This can then be extrapolated out with £1 purchases made around the world, effectively extending the trading hours, spoofing different exchanges, making 3 x purchases in 3-seconds, complicated further by private and dark pool exchanges etc. Looking at volumes of sales and buys will change the information coming back for analysis.

Buying or selling small numbers of shares, often in sequence is known as "spoofing the market," essentially misleading the market, to then take advantage of the direction you induce. It looks odd and counter-intuitive, but often works for the perpetrators.

Yes, a big green rocket and its not even bonfire night yet!

Shell increased the dividend by 15% in the 4th Quarter of 2022. It is not exactly off the radar that this might be a pattern that happens again. Many actually like the idea that the operational year is completed before a dividend hike is implemented - I certainly do. Also there is the feeling that January is a new operational year, the 15% hike in dividend is associated with the previous year, even though it is paid in March of the new year.

Dividends are often seen as a straight choice between buybacks and dividends, but it is not as straightforward as that. A dividend is paid and the capital invested goes to the shareholders & effectively disappears from the company perspective.

Buybacks are one element of redesigning and streamlining the capital structure of a company. They can be bought and cancelled beneficially based on the market capitalisation of the company i.e. if the company is undervalued in the markets, buying at say £9 or £15 and being cancelled well in advance, but in anticipation of, the SP reaching say £27. Buybacks when compounded relentlessly reduce the number of shares in issue. This reduces the amount of capital that the company pays out in dividends not just this year, but in future years too.

I tandem with this there is an assumption the the company makes the saved capital work harder, essentially "sweating" its assets. If it sells an asset like the Permian basin, although shareholders will initially hold a more valuable stake in a smaller company, there is an assumption that the capital asset exiting is replaced by other "better" assets, or becomes working capital working harder.

Along with massive FCF, reductions in debt, selling off overlapping assets, BP looking weak (no CEO and bad results) etc. a company can be seen as classically gearing up for an acquisition.

DS - it might be based on the number of Kangaroos mating in Australia at a given time, or the number of people of Guatemalan origin walking along Oxford Street in London at a given time, or the number of astronauts with a mole on their left shoulder, but it is usually hyperbolic unsubstantiated guesswork!

Telegraph on benefits of a BP merger with Shell:

https://www.telegraph.co.uk/business/2023/10/31/why-oils-next-mega-merger-should-be-shell-and-bp/

Halloween night for anyone who likes theatrics, BP with not even a Looney in charge since September, and profits dipping well below estimates, shouting at the markets BP needs to be better managed and soon!

Https://www.bbc.co.uk/news/business-67267719